Tim Hortons Inc. dominates the Canadian quick-service restaurant sector, and says it pours almost eight out of every 10 cups of coffee sold in Canada. It has set its sights on establishing a bigger presence in the U.S. market, but faces some tough competition there in the form of more established chains like Dunkin' Brands Group Inc.’s Dunkin’ Donuts and McDonald’s Corp.

Carrying out that expansion rests with Marc Caira, the former Nestle SA executive who took over as Tim Hortons’ chief executive nearly a year ago. Canada Real Time spoke with Mr. Caira after the company’s annual meeting in Toronto Thursday to understand how the double-double (the chain’s signature coffee with two cream and two sugars) can make it big in the U.S. Here is an edited transcript of his remarks.

WSJ: One thing that struck me from your five-year plan for Tim Hortons’ is how you describe the U.S. as a “must win” market. Why is it such a must-win for the company?

Mr. Caira: From my previous position at Nestle, I’m very familiar with the U.S. market. When I look at the U.S. market, I see the world’s largest economic market. I see the world’s largest food-service market. I see a food market that continues to grow. I see a population that continues to grow. I see a country [that's similar.]… When you look at all these things and you have a brand like Tim Hortons, why would you not go into that market? To me, it’s not a question of not being there, but what are you going to do that’s different, for you to succeed?

WSJ: Tim Hortons tried to penetrate the U.S. market a few times in its history without much success. What makes this effort any different?

Mr. Caira: There were some acquisitions in the past. Acquisitions are very difficult to make work in this industry. There’s not a lot of synergies and there aren’t a lot of costs you can remove to make it work. But they acquired a certain brand and then we changed the brand to Tim Hortons which didn’t have the awareness that it required to be successful. So, perhaps we tried to manage the U.S. like we managed Canada. That doesn’t work anymore. You also don’t have to have the same size format in the U.S. that you have in Canada. I’d rather much have a smaller footprint where the break-even is much more achievable.

WSJ: Then how does Tim Hortons differ from its competitors in the U.S.?

Mr. Caira: One, I think we have a better product. It’s somewhat subjective but I think I’m right. You can compare my product offering with Dunkin Donuts or McDonalds, I think we have healthier options, better quality and fresher products. The second thing, is that we are by far, the fastest in the [quick-service] industry. Customers value that. I know we’re the fastest because we measure that.

We have 859 restaurants in the U.S. Some of those are doing well, others should be better. Overall, we’re not happy with the U.S. business. Our research tells us that we’re very much a breakfast and coffee shop. People come to us at 6:30 in the morning to 10 in the morning. … The rest of the day isn’t as busy as we’d like to be. So, the challenge is how to build the brand past the breakfast part of the day.

WSJ: How do you adapt Tim Hortons to the U.S. consumer tastes? Do they differ from the typical Canadian Tim Hortons customer?

Mr. Caira: Well, we found that you don’t have to redefine your complete menu. There’s certain parts of the menu that can travel between the two countries but there are some specific differences. In some cases, the U.S. consumer likes a lighter coffee and larger doughnuts than the Canadian consumer. We also just launched a frozen hot chocolate in the U.S. It’s not available in Canada, but through research in the U.S., we found that Americans find it more of a dessert item and it’s performed phenomenally well.

About Canada Real Time

Canada Real Time provides insight and analysis into what’s making news in Canada, a country punching above its weight on the world stage thanks to its vast resources and strong banking sector. Drawing on the expertise of The Wall Street Journal and Dow Jones Newswires, we take a look at developments in fields ranging from business to politics to culture. You can contact the editors at canadaeditors@dowjones.com